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Katrin-Herrling-Funding Xchange
July 15 2020

Coronavirus loans ‘only provide cashflow relief for three months’

Marc Shoffman Industry News, News, Top 3 Bounce Back Loans, coronavirus, FundingXchange, Katrin Herrling, Rishi Sunak, Treasury

The government-backed emergency coronavirus finance is only providing businesses with relief for three months, Funding Xchange claims.

Analysis by the business finance aggregator found 60 per cent of borrowers that come to its platform have insufficient free cashflow to repay bounce back loans.

It comes amid rumours that the chancellor Rishi Sunak will introduce some form of repayment flexibility.

Read more: Funding Xchange partners with Enterprise Nation in bid for BCR funding

Read more: Boost for SMEs as business loan application times drop

“There is real urgency to resolving this issue,” Katrin Herrling (pictured), chief executive of Funding Xchange, said.

“The data we have collected from those businesses that took advantage of the coronavirus loans, but have subsequently applied through the Funding Xchange portal for further loans, indicates that, for many the government loans have provided enough relief for no more than three months.

“For this reason, it is critical that the chancellor’s anticipated resolution is implemented right now.

“Without this, it is difficult to see new commercial lenders providing ongoing debt support for the businesses that have not yet started to return their trading to pre-Covid levels. It’s very much a case of do it now or see many businesses die.”

Read more: Banks failing to meet loan demands from established businesses

Further support for motor finance and high-cost credit customers Robo.cash reports boost from increased initial P2P investments

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